Fidelity launches tokenized market fund with Ondo as anchor partner

Fidelity has launched the Fidelity Digital Interest Token (FDIT), an on-chain money market fund backed by mostly U.S. Treasuries, mainly from Ondo Finance’s Short-Term U.S. Treasuries Fund (OUSG) as the only anchor and largest investor. According to Ondo, OUSG makes up more than 99% of FDIT assets at this time. The launch is yet another milestone in the continued efforts by major asset managers to tokenize traditional financial products.

Fidelity now joins BlackRock, Franklin Templeton, and WisdomTree in offering tokenized money market or Treasury funds, demonstrating the rapid transition of real-world assets from experimentation to mainstream finance.

Ondo’s role in the tokenization momentum

Ondo Finance has been at the forefront of this change, having launched OUSG in January 2023, as one of the first tokens with on-chain access to U.S. Treasuries. Anyone can buy or invest in OUSG at any time. And this is now designated as the flagship tokenized product of Ondo, boasting a total value locked (TVL) of more than $730 million, which provides instant subscriptions and redemptions, daily interest accruals, and support across multiple blockchains, including Ethereum, Solana, Ripple, and Polygon. Included in the OUSG portfolio of product offerings, Ondo has already introduced other tokenized Treasury instruments, specifically BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) — which was itself an innovator in allowing instant redemptions to USDC through Circle — Franklin Templeton/BENJI and WisdomTree/WTGXX. Now, with Fidelity’s FDIT added, Ondo is growing its network of top-tier asset manager partnerships, which will facilitate liquidity and maturity of the ecosystem. On Sept. 3, Ondo Finance and the Ondo Foundation launched Ondo Global Market, a platform bringing over 100 tokenized U.S. stocks and ETFs to Ethereum. The launch provides non-U.S. investors with 24/7 on-chain access to U.S. equities and ETFs, furthering Ondo’s mission to bridge traditional finance and blockchain.

The bigger picture

The launch illustrates the gradual tokenization impacts capital markets and, by placing money-market funds onto blockchain rails, managers can offer faster settlement, 24/7 access, and potential interoperability with the extended digital-asset ecosystem again. “Fidelity’s entry marks another major milestone in the institutional embrace of tokenization,” Ondo said, adding that this partnership solidifies Ondo’s role as a bridge between traditional finance and decentralized solutions. As the tokenized finance industry develops, Ondo says it will continue to grow its infrastructure and intends to be at the center of building the “open and global” next generations of financial systems.